New TDS guidelines

Important: New guidelines regarding TDS deduction on the interest earned in NRO/NRE deposits

In accordance with the changes proposed in the Union Budget 2018 with effective April 01, 2018, Education cess and secondary education cess presently applicable @ 3% has been abolished and replaced with Health and Education Cess applicable @ 4%.

Accordingly, the withholding tax rates for interest earned on NRO savings bank account and Deposits will be as under:

Total Interest Earned on NRO Deposits and SB accounts

Withholding tax rate%

Less than or equal to ₹ 50 lakhs

31.2% (tax rate @ 30%+surcharge 0% + cess 4%)

Greater than ₹ 50 lakhs but less than ₹ 1 crore

34.32% (tax rate @ 30%+surcharge 10% + cess 4%)

Greater than or equal to ₹ 1 crore

35.88% (tax rate @ 30%+surcharge 15% + cess 4%)

Any interest paid / accrued on or after April 1, 2018 will be subject to the mentioned withholding tax rates.